Trader Frederick Reimer works on the floor of the New York Stock Exchange. / Richard Drew, AP

by Adam Shell, USA TODAY

by Adam Shell, USA TODAY

The Dow Jones industrial average is back. All the way back. At the markets' opening Tuesday, the benchmark index sailed past its all-time closing high of 14,164.53 set Oct. 9, 2007. And by the closing bell, it had stayed in that stratosphere: The Dow had gained 0.9% for the day to finish at 14,253.77.

In late afternoon trading, the Dow Jones industrial average was up 0.9%, or more than 125 points to above 14,255. Its intraday high, reached around noon ET, was 14,286.37. The Dow has erased the 54% loss it suffered in the brutal 2007-2009 bear market. Just two of the Dow's 30 stocks, drug giant Merck and soft drink maker Coca-Cola, were trading lower.

The broader Standard & Poor's 500 stock index ended up 1%, just shy of 1,540 and less than 30 points from its record closing high of 1,565.15 set the same day as the Dow's record in 2007.

The Nasdaq composite index was trading at its highest level since November 2000. The tech-heavy index finished up 1.3% at about 3,224.13, though it remains well below its all-time closing high of 5,048.62 set March 10, 2000. Google shares hit a record high, up 2.1% at the close to $838.60. Apple shares, at $431.14 -- up 2.7% -- rebounded sharply from a 52-week-low close of $420.05 on Monday.

What's important now is whether the stock market can hang onto its gains through Tuesday's trading session in the face of investor fears about the impact of $1.3 trillion in federal budget spending cuts this year that kicked in Friday. Federal Reserve Chief Ben Bernanke has said the sequester-triggered cuts could cut at least 0.5% percentage point from 2013's economic growth.

Interest rates are at ultra-low levels, thanks to the Fed's bond-buying program to stimulate borrowing and job creating. On Tuesday, the yield on the 10-year U.S. Treasury note was at 1.89%.

But Tuesday's Dow record could elevate the mood of investors, many of whom are still reeling from the steep drop triggered in 2008 as the housing market bubble burst and the value of hundreds of billions of dollars in mortgage-backed securities plummeted.

The Dow's massive move up from its bear market low set March 9, 2009, was driven by 18 Dow stocks that each boasted gains of more than 100%, according to data from S&P-Dow Jones Indices.

American Express, the financial services and travel company, was the biggest gainer, rising 491%. Rounding out the top five gainers are home improvement retailer Home Depot, up 286%; heavy equipment maker Caterpillar, up 275%; media giant Walt Disney, up 258%; and General Electric, up 214%.

The only Dow stock to post a negative return since March 9, 2009, was Hewlett-Packard. The computer maker fell 22%.

The Dow's new high is "important from a psychological standpoint," says Andres Garcia-Amaya, global market strategist for JP Morgan Funds.

And this bull market, four years old this week, may have more room to run, says Garcia-Amaya, despite lingering worries about the nation's fiscal troubles, Europe's debt and political woes and other lurking risks.

Working in investors' favor is that the broad stock market is basically back to where it was in 2000, while corporate earnings have doubled since then, making stocks a good value, says Garcia-Amaya.

More important, he says, is that the mood of the market is far from overly exuberant, as it was prior to the tech-stock crash in 2000 and at the top in 2007, when the prices of real estate and stocks were rocketing.

"We don't think we are seeing exuberance in the current market," says Garcia-Amaya. "The entire rally has been hated. And that makes us feel more comfortable."

Not every investor will be celebrating the milestone, says Joe Quinlan, chief market strategist at U.S. Trust.

"It depends on whether you have been in or out of the stock market," Quinlan says, noting that many investors went to the sidelines in early 2009 and haven't gotten back in. They have missed a rally in which the Dow has gained more than 115%.

Quinlan says he believes the Dow's run has legs: "Stocks are under-owned by both retail and institutional investors," says Quinlan, who says there is a lot of cash sitting on the sidelines that could come back into stocks if the global economy keeps chugging along and well-run corporations in the U.S. keep pumping out profits.

Others aren't so sure. Beware of new highs, cautions Walt Zimmermann, a technical analyst at United-ICAP. He sees a bearish chart pattern that points to a market top.

"The attitude investors should have is that they are walking on thin ice," says Zimmermann. "The ice is softening and they should be listening for cracks."

But around the world, investors were buying Tuesday. Markets across Europe rallied Tuesday with Germany's DAX 30 index closing up 2.3% at 7,870.31, France's CAC-40 index finished up 2.1% to 3,787.19, and Britain's FTSE 100 index ended up 1.4% to 6,431.95.

Asian stock markets advanced Tuesday as investors registered approval for China's government spending priorities announced at its annual congress.

Markets in Hong Kong and mainland China drew encouragement from a speech by outgoing Premier Wen Jiabao and presentation of the country's budget at the opening of the annual National People's Congress, a largely ceremonial legislature.

Benchmark oil for April delivery was up 67 cents to $90.79 per barrel in electronic trading on the New York Mercantile Exchange. Oil prices traded below $90 a barrel most of Monday after two months of steep gains.